Data Pricing Benefits From Competition

We are all aware of the law of supply and demand, right? That when the demand is high and the supply is low, the prices go up. Or that the price goes down because the supply is high and the demand is low. So, let us be reminded of the role of competition in the market. Prices usually go down when there is too much competition in a specific market. Data recovery prices (http://www.harddriverecovery.org/pricing.html) in our industry have come down over 50% from just 10 years ago, as an example.

With technology dominating the world today, it is not surprising that many entrepreneurs want to join in on the bandwagon and get their piece of the cake. And as such, having many players in the field has a significant impact on commodity prices. For instance, aside from the actual gadgets, data recovered from RAIDs is a sought after commodity as well as it allows people to communicate on a global scale.

Consumers can expect better service at cheaper rates with telecom majors gearing up to wage a price war to protect their market share in mobile data services.

On Friday, Bharat Sanchar Nigam (BSNL) introduced a special promotional offer giving away unlimited calls at Rs 339 plus unlimited data with fair use policy of 2GB per day with 28 days’ validity. BSNL’s move is in response to RJio’s aggressive pricing policy.

Meanwhile, telecom operator Idea Cellular has said it will also start selling 1GB and above mobile data plans across its 2G, 3G and 4G networks all at the same price by the end of this month. “Idea will allow open market data recharges of 1GB and above to work on Idea’s 2G, 3G or 4G network without any differential prices and this will be rolled out nationally by March 31, 2017,” a company statement said.

Prices are likely to come down further, according to Tapan K Patra, director, Association of Competitive Telecom Operators.

“Data consumption has increased in India significantly. The rates that are being charged will fall further,” he said.

Even remote places now have access to the Internet and it is the reason why data has become more in-demand than ever. People from all walks of life need data for various reasons and telecom companies will do everything to make sure they get the bigger profit than their competitor.

It’s no secret that the global economy has been under strain since the 2008/9 economic crisis.

Global financial institutions and our reserve bank have downward revised South Africa’s GDP in recent years.

This in turn has put pressures on the growth and investment projections that companies set themselves year-on-year while rising to the challenge of social-economic development.

Mobile communication companies like Vodacom have invested heavily in infrastructure and complemented this with investment in human resources, communities, and contributions to economic transformation.

Despite the challenging economic environment, Vodacom continues to outperform its targets – evidenced by the

Group’s 5.3% growth in service revenue in the first half of the current financial year and its strong performance in 2015/16.

This has enabled Vodacom to prioritise its commitment to the digital and knowledge economy by investing in its network infrastructure.

Including the current financial year, Vodacom will have invested R27.4 billion in its network in South Africa over a three-year period – as pressures to keep up with coverage, speed, and quality demands intensify.

And there will be lots of changes on data pricing to make sure they stay competitive.

Accordingly, Vodacom’s pricing transformation plan has seen the company reduce the price of data and voice by more than 60% and 57% respectively over the past four years.

However, Vodacom acknowledges that more needs to be done to respond to consumer needs and the company remains committed to data cost transformation.

Data is such a precious non-tangible commodity. Considering that data was unheard of before the web exploded and became a household name, telecom companies have milked a lot of money from consumers who will gladly shell out their hard-earned money just so they stay connected to the Internet in their day-to-day. And the beauty of competition benefits the consumers in general because the price of data goes down without them ever sacrificing connectivity.